Curtis Leibel 780-438-2500

Real estate is a rare investment where in almost all cases, over an extended period of time, you can expect the value of your property to increase.  There are of course exceptions to the norm (industry fueled areas where resources have been depleted, natural disasters, etc…) but generally an investment in a home will increase over the long term.  Thus, the decision between buying a used home vs. building a new home is often a tough decision to make, because unlike a used car, you are not getting a discount because the home is older.

Keep in mind that everybodys situation is unique to themselves, so something seen as a positive for some might be seen as a negative by others.  Here is a quick list of factors that may or may not make one seem more appealling to you than the other….

BUILDING A NEW HOME

Maintenance:  has that new home smell  😉  There is alot of comfort knowing that when you move into a new home there will be very little maintenance or large expenditures on repairs.

Cost: You are usually getting a lot more house for less money

Location:  Unless you are spending big money on tear down lots in the center of the city, new homes are generally located on the outskirts of the city

Resale: If you are looking to sell in the near future – the other houses in the development are very similar so there is not much to seperate one from the other.  This can be good or bad.

Equity: Unless you plan on finishing a basement or building a suite, other than time there are not many ways to help your property appreciate – therefore your investment is based solely on the trends of the market.

Initial move in period:  Could be lots of mud, machinery, and noise as other houses in the community are being built.  There could also be settling issues that arise over the first few years.

New Home Warranty – alot of builders provide a new home warranty which protects the home for the first few days

Possession day:  Could be delayed because of finishing delays

Bonus: you know that no one has ever lived in this house before and it is all yours!

BUYING A USED HOME:

Maintenance:  obviously depends on the age of the home, but you can expect a lot more work and upkeep.  There could be some large expenditures in your new future (ie. shingles, furnace,etc..)

Cost:  Surprisingly quite often the cost of an older home is the same or more than that of a new build.

Location:  One of the reasons the costs are higher is usually because the location is better and the neighborhoods are more established.

Resale: There is a lot more variety in houses in the established neighborhoods.  It makes it harder to predict the value of your home, but also provides a lot more variety for the buyer.

Equity:  If you are willing to put in some sweat, buying an unrenovated home is a great way to build equity and make a home that suits your needs and tastes.

Initial move in period:  Still susceptible to the nuiances of the community, however often they are more predictable and less extensive.

New Home Warranty – other than Real Property Reports that carry level some of protection, buyer beware!  If the furnace breaks the day after possession its on your dime.

Possession day:  Could still be delayed by financing issues or residents moving out, but much less common.  You can expect to do alot more cleaning on move in day as its always a guess as to how clean the previous owners have left it.

Bonus: There is a lot more variety in location and style of houses if you are willing to look in different areas and time periods.

These are some of the major factors when considering whether to buy old or build new.  As always, we are just brushing the surface, so if you have any more questions dont hesistate to give me a call!

Capital gains are taxes that you pay on the profit or increase in value of a property when you sell it.  That being said – capital gains means something different to everyone.  The best thing to do is talk to your accountant before you sell any second property to see how it applies to your specific portfolio.

I try and keep this blog as simple as possible and a lot of the topics I speak about, we just brush on the surface of the idea.  So the most important question is: how do you know if you are subject to paying  capital gains taxes and how much will it be?

1)   Basically any property that you do not call your principal residence is considered an investment and thus subject to the tax.  If you do not live in the residence (and you can only have one principal residence) and the value of the house upon sale is greater than the value you purchased it at + renovation or other expenses you incurred on the property, you will have to pay capital gains.  Yes, there may be some loopholes ie. passing property through family, forced sales or relocations for work, etc… but generally you can expect to pay tax if you made money on it.

2)  The amount of tax on capital gains varies throughout North America, but in Alberta you can expect to pay tax on 50% of your profit.  Ie. make 100,000 on the sale of a rental property – 50,000 of that is susceptable to a tax rate coinciding with your specific tax bracket.  (In alberta the lowest personal tax bracket would be 15.25+10% =25.25%)  So in this example you would pay a minimum of $12,625 on $100,000 profit if you were in the lowest bracket.  There are other routes one can take, involving running it through a business that may or may not be advantageous to you.  Again the best advice – ask your accountant before you sell to figure out what the best route for you to take is.

I have a new property that I just listed for sale at the popular Mulhurst Village at Pigeon lake.  One block off the lake, complete with 1.56 acres, this lake home is all you could ever want.  Here are the details:

1 block from Pigeon Lake and the golf course, quietly hidden amongst the trees
on 1.56 acres of land. This beautifully maintained 1941 sq ft 2 storey home has
loads of features. The house itself boasts a tiled kitchen, newer carpet in the
living room, 3+1 bedrooms and 3 bathrooms including an ensuite. It also features
a large double garage with a brand new door, RV parking, 2 driveway access,
large deck, master bedroom balcony, wet bar plus an enclosed hot tub. This is
the best of country living with the benefits of a municipality.

Give me a call if you have any more questions about this property, or would like to set up a viewing!

I recently listed 2 new homes in very desirable areas:

1) First one is beautiful home in Strathcona located on a beautiful lot steps from the river valley.  This home boasts completely upgraded upstairs with hardwood floor and newer kitchen cabinets, as well as a large double garage with loft in the backyard.  All this for $419,900 – the lot is worth at least this much!

2)  Next up is the desirable location of Terwillegar town.  This 3 bedroom, 3.5 bath 2 storey home also has a lot of upgrades, including hardwood floors throughout the main floor, carefully crafted archways and a completely finished basement.  There is little yard work to do as it has all been landscaped magnificantally with rocks, perennials and a vegetable garden.  Cant beat the price at $449,900!

Stay tuned, as coming up in a few weeks I will be listing a custom million+ home being built in the quickly rising Windermere neighbourhood.